Industry super funds await new rules for governance

“We are not going to make unexpected or unconsulted changes [to superannuation],” said a spokesman for Assistant Treasurer Arthur Sinodinos, pictured.
Photo: Wolter Peeters

by
Gemma Daley

The Coalition is holding more briefings on its planned superannuation changes and has assured the sector it will ­consult the industry widely before it make changes to governance and the role of unions.

The retirement funds sector also played down reports of changing governance for industry funds to having one-third independent directors, one-third representing employees and the rest representing employers, saying the Coalition had not yet settled on a model.

That model compares with the present 50-50 split between employer and employee directors.

“We are still taking briefings and, in regard to superannuation, we are not going to make unexpected or unconsulted changes," said a spokesman for Assistant Treasurer
Arthur Sinodinos
.

The Coalition’s election policy document said it would improve standards and better manage conflicts of interest on corporate governance, moving more in line with principles applicable to ASX-listed companies.

It said there would be “appropriate" provision for independent directors, mandatory disclosure of conflicts of interest and specific advice to the prudential authorities on people who planned to sit on two boards in the $1400 billion pool of workers’ savings.

Possible delay until July 2014

The Australian Institute of Superannuation Trustees (AIST) and the Industry Super Network (ISN) said the Coalition had promised to discuss any changes with the industry before it ­legislated change.

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They also said the government might wait until the new Senate took office next July before introducing changes to governance of the nation’s pool of funds.

“Moves to change the board composition of not-for-profit funds are at odds with current practices among listed companies in the ASX space," AIST chief executive
Tom Garcia
told The Australian Financial Review.

“There is no precedence for mandating board composition and there is no evidence that such an approach would benefit members so we question the need for change."

Industry sources also questioned whether someone such as embattled former Health Services Union president
Michael Williamson
could be removed purely through governance changes.

ISN chief executive
David Whiteley
said he expected broad consultation before governance rules were changed.

“We expect the Coalition would consult before [making] any significant changes to the super industry, particularly which consideration is being given to changes of governance around the funds," Mr Whiteley said.